Austria’s transformation of its R&D system over the last decade has attracted the attention of France, Spain and the Czech Republic, which are each following Austria’s model in hopes of attracting new R&D investments. This year, the country’s R&D spending as a percentage of GDP is expected to be 2.68%, compared to 1.8% 10 years ago. Since 2000, R&D spending has risen 70% to €6.8 billion ($9.3 billion) in 2007 and is forecasted to total €7.5 billion this year. Domestic companies account for nearly half of the country’s R&D spending and the government represents more than one-third. Efforts by Chancellor Wolfgang Schüssel’s government to raise R&D spending included incentives to companies for conducting research, such as tax cuts and subsidies. In 2005, corporate taxes were cut from 34% to 25% and levies simplified, making the country a more popular location for companies’ headquarters for the region. Tax cuts benefited corporate earnings, drawing further investments. The country is now focused on improving the promotion of its R&D advantages. The Austrian Business Agency is advocating for new laws to simplify immigration and to lower income taxes.

Source: Financial Times